Installing Windows 98 SE on Parallels 8

I am a newbie to Parallels, and am having a lot of trouble. I have searched both these forums and Google thoroughly, and have been utterly unable to find a solution. So I am going to break down what is happening step by step in the hopes that somebody here can help me.

I am trying to run Windows 98 SE on Parallels 8. I have a bootable iso image of Windows 98 SE on my computer (I don't have a CD or disk of any sort, just the iso file). Here is what I do:

1) I open Parallels Desktop, choose New Virtual Machine, and select the option for Install Windows or another OS from DVD or image file.

2) In the "Install From" drop down menu, I select the path to my iso file

3) I continue on until this window appears:



4) No matter what choice I choose there (or on the several Windows 98 Setup screens that follow), I end up with this:



5) If I ignore this warning and press "Enter," Windows 98 installation continues. It asks me to format my C drive and all that. At the end, it starts to boot up Windows, but then gives me this message:



6) At this point, the virtual machine is stuck. It tries to boot Windows and gives me that message.

All this happens regardless of what options I choose during the installation process. I have tried every possible setting, and none of it will work.

Can anybody tell me what I am doing wrong? Why won't Parallels work? It is supposed to accept iso files, and I know my iso file is both bootable and not corrupted.

I have searched around thoroughly, but have not found a solution anywhere. What am I supposed to do?

 

I am having the identical problem on the latest version of Parallels Desktop 9. None of the documentation addresses this situation. Clearly this situation is off the ranch, not part of the wizard process, entirely unexpected and so far unsolvable. I'm an old hand at out-thinking bad software, including Windows installation nightmares, and I also can't find any solution to this nonsense.

It's literally a YEAR since RyNyeify asked for help with this problem. And no one replied?

Help please! ASAP! I'm going to nag! Get ready Parallells!

 

Hi RyNyeify,

Please follow the steps as suggested in page #227 at http://download.parallels.com/desktop/v6/docs/en/Parallels_Desktop_Users_Guide.pdf

Thanks,
Manoj.